Posts related to ‘Compensation’

Big Goldman Sachs (GS) Shareholders Fight Bonuses

A number of large Goldman Sachs (NYSE:GS) shareholders would like to see the firm’s profits in their pockets and not in the bank accounts of the Goldman partners.

The Wall Street Journal reports that many institutions that hold Goldman shares are upset that the firm’s EPS will  be down this year even though the investment bank will post record sales. A great deal of this drop is because Goldman issued 100 million shares to improve its balance sheet. Cutting compensation would rebuild EPS figures which should help drive up the value of the stock. Read More »

Posted on: November 20, 2009 – 4:55 am in Banking, Compensation, ,

$1 Salary For Pandit: Citigroup Gets What It Paid For

The most charitable thing that can be said about Vikram Pandit, the CEO of Citigroup (NYSE:C) since December 11. 2007, is that he was in the wrong place at the wrong time. The bank’s stock is down 90% since his first day as chief executive. The shares of other large international banks were battered by the credit crisis, but JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) have gained most of their value back during the two-year period. Bank of America (NYSE:BAC), the most hapless of all the large financial firms, has even performed better than Citi in the market. Read More »

Posted on: November 18, 2009 – 5:06 am in Banking, Compensation, , , , , , , ,

The Pay Czar Blinks, A Little

The pay czar, Kenneth Feinberg, is tough man. He has forced firms that have taken TARP money to sharply drop the base salaries of their senior managers. Executives will have to take more of their compensation in stock and these grants will be based on performance.

Feinberg has been so adamant about keeping compensation down that he apparently pushed the CEO of AIG (NYSE:AIG) to the point where he threatened to resign. AIG cannot keep its top talent of it cannot pay a competitive wage, or so the story goes. Even the chairman of  GM and the board of Bank of America (NYSE:BAC) have said pay caps may keep them from getting the best talent on the market. Read More »

Posted on: November 17, 2009 – 5:32 am in Compensation

Bill Gates Says Wall St. Pay Is Too High

bearBill Gates is one of the richest men in the world and the founder of one of the most successful companies ever created. That means that the media hangs on every word he utters whether he has any background for his opinions or not.

Yesterday, Gates said Wall St. management pay is too high, and then said that it isn’t. Read More »

Posted on: November 12, 2009 – 6:21 am in Compensation,

When The News Is Not The News: The AIG CEO Story

bankRobert Benmosche, the CEO of AIG (NYSE:AIG) is known for being hot-headed, mercurial, self-centered, brilliant, ill-tempered, and gifted. He is just the sort of executive who threatens to quit his job several times a year. He probably likes to hear his board and colleagues say how much they need him.

The Wall Street Journal reported that Benmosche told his board that he was ready to quit because pay czar Kenneth Feinberg would not go along with requests from AIG to allow key employees to have base salaries above those Feinberg was prepared to approve. AIG claimed that it could not retain its best talent with the prospect of only modest compensation. There is nothing unusual about that. The chairman of GM made a similar statement about  the difficulty of hiring and retaining talent at the car company when the federal government is unbending in its plan to keep pay scales low at firms with TARP investments. Read More »

Posted on: November 11, 2009 – 8:25 pm in Compensation, Financial Stocks,

How Much is Benmosche Really Worth to AIG? (AIG, MET)

AIG LogoAmerican International Group, Inc. (NYSE: AIG) is under pressure today after its new CEO Robert Benmosche, who has not even had a full three months yet on the job, has effectively threatened to walk out as CEO of AIG. The reasoning is over the intense restrictions of being under the government, particularly as it pertains to compensation limits.  What is interesting is that this may be a strong CEO throwing the gauntlet at the government.  But we also want to explore what Benmosche is actually worth in real dollar terms to AIG today.  Chances are it is far more than just this 4% we have seen the stock drop today.
Read More »

Posted on: November 11, 2009 – 1:00 pm in Compensation, Editor's Picks, Financial Stocks, Insider Activity, Management Change, Regulation, Rumors, Shareholder Issues, Turnarounds, ,

Goldman Sachs Is Doing “God’s Work

biotechBy Douglas A. McIntyre

Lloyd Blankfein, the CEO of Goldman Sachs (GS) has put an unusual spin on the bank’s activities. He says his firm is doing “God’s work.” This may seem like an audacious statement coming from a man whose company has been harshly criticized for planning to give many of its employees multi-million pay packages just a bit more than a year after the collapse of the credit markets.

Read more….

Posted on: November 9, 2009 – 5:42 am in Compensation,

Wall St. Bonuses Will Rise 40%

GeithnerThere has been plenty of evidence that firms like Goldman Sachs (NYSE:GS) have had such huge profits that their bonus payouts may be at all-time highs.

The federal government has systematically begun to control bank pay packages. The Treasury “pay czar” is effectively controlling compensation at companies which still owe TARP money. The Fed is pressuring other large financial firms to tie pay to risk.

None of those efforts seems to be working well because bankers are ignoring the signals from Washington. Read More »

Posted on: November 5, 2009 – 5:27 am in Compensation,

24/7 Wall St. TV: Another Pay Outrage: University Presidents Making Over $1 Million

24/7 WallSt TVWall St. executives are apparently in for their best pay day in history, despite the fact that the collapse of the credit markets and the beginning of one of the worst recessions in US history are barely a year old. Goldman Sachs (NYSE:GS) posted record profits for its fiscal year and it is anticipated that a number of partners there will make tens of millions of dollars. Outside analysts expect the Goldman comp poll will be about $22 billion which is over $700,00o for each person at the investment bank.

The huge Wall St. pay packages may push Congress to attempt to limit financial executive pay. The Treasury has already appointed a pay czar to limited compensation among senior management at financial firms which have not paid back TARP funds. The Fed may begin to offer guidance to companies that it regulates, in part to cut down risky behavior that sometimes results in short-term profits.

Many public companies have cut top management pay has profits have been undermined by the recession. Many chief executives will also lose a big portion of their compensations because the value of their stock options has been destroyed by the falling market.

One place that pay limits do not seem to have reached is universities. A new study by the Chronicle of Higher Education shows that 23 college presidents made over $1 million in the 2007-2008 fiscal year. Based on data released by Harvard, Yale, and other elite universities, these extravagant payments were made during the same period that many educational institutions lost a large part of their endowments in the stock market meltdown. Read More »

Posted on: November 2, 2009 – 1:36 pm in Compensation, TV

More Bizarre Pay Czar News

GeithnerA new analysis from The Wall Street Journal shows that pay czar Kenneth Feinberg raised the salaries of most of the executives over which he has jurisdiction. The paper reports that base salaries climbed to $437,896 or 14% among the managers pay packages that he reviewed.

If Feinberg’s goal is to make executives at financial companies that owe the government money think long term, then he must be tying hundreds of thousands of dollars per person to stock options, restricted stock grants, and cash bonuses. Read More »

Posted on: October 28, 2009 – 6:13 am in Compensation, , ,

B of A And Citi Top Managers Earn $18 Million Each

bank

Bankers have become more and more adroit at shooting themselves in the foot this year. Congress, the Administration and the public are already upset by actions that they believe caused the credit crisis, forcing the government to pump hundreds of billions of dollars into the financial system. Goldman Sachs (GS) has drawn tremendous criticism because it will probably pay out record bonuses this year.

Now, it turns out that the the managements of flailing firms Bank of America (BAC) and Citigroup (C) paid themselves extravagant sums in 2008

Read more…..

Posted on: October 26, 2009 – 8:22 am in Compensation, , ,

The Fannie-Freddie Equity Conundrum (FNM, FRE)

burning-house-image4It is no secret that things could be much better at Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).  But the last week or so has re-highlighted just how dire the situation is for these government sponsored entities and perhaps more importantly for the common shareholders. Both Freddie Mac and Fannie Mae were forced into federal conservatorship last year by Uncle Sam.

We have taken an in-depth look here at the situation and the past to get a feel for the future of these companies (GSE’s).  If you parse through the data and watch what has been happening in Washington D.C. of late, there is the clear reminder that these emperors have no clothes on.  In the world of Star Trek, these companies stockholders may be facing a Kobayashi Maru scenario.
Read More »

Posted on: October 25, 2009 – 7:45 am in Accounting, Bankruptcy, Bonds, Compensation, Corporate Governance, Cult Stock, Editor's Picks, Financial Stocks, Housing, Law, Politics, Regulation, Turnarounds, ,

Ten Canadian Companies With Management Compensation Issues

welchThe Corporate Library’s latest annual review of corporate governance  at TSX 60 companies in Canada turned up eleven which present high or very high concerns with regard to CEO compensation:

Kinross Gold Corporation (NYSE:KGC)
EnCana Corporation  (NYSE:ECA)
TransCanada Corporation  (NYSE:TRP)
Canadian National Railway Company  (NYSE:CNI)
BCE Inc.   (NYSE:BCI)
Royal Bank of Canada   (NYSE:RY)
Thomson Reuters Corporation  (NYSE:TRI)
Husky Energy Inc.  
Shoppers Drug Mart Corporation  
Potash Corporation of Saskatchewan Inc.   (NYSE:POT)
Rogers Communications Inc.  (NYSE:RCI)

US companies aren’t the only ones with pay issues.

Douglas A. McIntyre

Posted on: October 23, 2009 – 6:32 am in Compensation, , , , , , , , ,

The Pay Czar’s Day In The Sun

ewisPay czar Kenneth Feinberg has already effectively clipped the compensation wings of Bank of America (NYSE:BAC) CEO Ken Lewis by taking away all of his 2009 compensation. Feinberg now plans to cut the pay packages of 175 executives at seven companies receiving federal aid by as much as 50%. Some base salaries will drop to a tenth of what they are now.

Not all the managers will lose the great majority of their compensation. Some of the money will be shifted into long- term bonus pools with the theory being that the alteration will cause executives to manage for multi-year results and take on less risk for their companies. Read More »

Posted on: October 22, 2009 – 5:24 am in Compensation, Regulation, , ,

Wall St. Bonus Fever Spreads To UK

bearWall St. will not be the only place where key workers will get multi-million dollar bonuses this year.

RBS (NYSE:RBC), a UK financial firm which came within days of failing and received massive government aid, will pay some of its executives and traders up to 5 million British pounds. Many of the packages will reach levels similar to those of the banking boom years of 2006 and 2007.

The Times of London also reports that management at Barclays (NYSE:BCS), one of the largest banks in the world, will give senior staff bonuses which reach well into the millions of pounds. Payments to top management may go into the tens of millions. Read More »

Posted on: October 17, 2009 – 9:00 pm in Banking, Compensation, , ,

Bank Of America’s (BAC) Ken Lewis: You Can Keep Your Job, But Not Your Salary

ewisBank of America (NYSE:BAC) CEO Ken Lewis is still the firm’s CEO. He was going to leave at the end of the year. The board of the bank would like to find a replacement sooner, but they are either indecisive or can’t find a good candidate. Lewis still occupies the corner office.

Lewis, always a good sport, agreed to pay back his salary for 2009 and forego any further pay or bonus for the year, which is at the very least a generous gesture.

According to The Wall Street Journal, the compensation reduction was not entirely Lewis’s idea. The paper writes that “The move was demanded by Kenneth Feinberg, the U.S. Treasury Department’s special master for compensation, and was agreed to by Mr. Lewis and the bank. Mr. Feinberg’s rationale is based largely on the fact that Mr. Lewis will leave the firm with a package of retirement benefits and other stock awards worth between $69.3 million and $120 million.”

That would almost certainly mean that Lewis gets to take an extraordinary sum of money as he leaves B of A without challenge from Feinberg. Lewis claims he saved the bank and, in its hour of need gave the Treasury and Fed help by sticking with his decision to by Merrill Lynch. Without Lewis, the entire credit system could have collapsed.

At least that is the way he sees it.

Douglas A. McIntyre

Posted on: October 15, 2009 – 5:46 pm in Banking, Compensation,

Kitchen Worker Gets AIG (NYSE:AIG) Retention Bonus

bearAIG (NYSE:AIG) is a meritocracy. One of the firm’s best kitchen workers got a $7,70o retention bonus as part of the firm’s plan to keep key employees. According to the FT, the payment was made in March.

Kenneth Feinberg, the government’s pay czar is asking that AIG retention bonuses be cut by $198 million for 2010 and that the company “claw back” $45 million from last year. Read More »

Posted on: October 14, 2009 – 6:08 am in Compensation,

Goldman Sachs (NYSE:GS) $22 Billion Payroll

bankIts fiscal year coming to an end, Goldman Sachs (NYSE:GS) is about to post record annual profits less than a year after the peak of the credit crisis. It is as if almost nothing had happened. The bank’s trading desks and fixed income operations were barely affected by the global upheaval, and now the firm’s employees are about to get their rewards.

The latest estimates are that Goldman’s total compensation to company employees will total $22 billion, about $700,000 a person. That means that some of the most senior managers at the firm will make tens of millions of dollars. Read More »

Posted on: October 12, 2009 – 5:35 am in Compensation, , ,

Sirius XM (NASDAQ:SIRI) Management’s Big Stock Sales

TVThere are two ways to look at management’s sales of millions of shares in Sirius XM (NASDAQ:SIRI). One is that the executives saved the company from an almost certain bankruptcy and deserve a pay day for that. The other is that the people running Sirius believe that the stock has peaked.

According to a report in The Wall Street Journal, the top five officers at Sirius plan to sell shares they have received as they vest. The total of the grants is 10 million shares which vest over 40 weeks. The executives have already sold seven million shares worth $3.2 million. Read More »

Posted on: October 7, 2009 – 5:42 am in Compensation,

Citigroup (NYSE:C) Tries To Dump Its $100 Million Man

bankAndrew Hall, the head of Citigroup’s (NYSE:C) Philbro commodities trading unit, has been a thorn in the side of the bank since it was disclosed that he made as much as $100 million. Congress, the Administration, and the public were up in arms over how a bank that was getting tens of billions of dollars in aid could pay one executive that much.

The problem for the government was that Hall has a contract and that deal gives him a percentage of the profits from Philbro. He made a lot of money for Citi and in the process fairly enriched himself. That has not quieted critics. Read More »

Posted on: October 7, 2009 – 5:10 am in Banking, Compensation,